Jobs Come and Go (One of the smartest economists in the world hits the nail on the head)

www.townhall.com ^ | 11/26/2003 | Walter E. Williams

[sly671]

Jobs come and go Walter E. Williams

In 1970, the telecommunications industry employed 421,000 switchboard operators. In the same year, Americans made 9.8 billion long distance calls. Today, the telecommunications industry employs only 78,000 operators. That's a tremendous 80 percent job loss.

What should Congress have done to save those jobs? Congress could have taken a page from India's history. In 1924, Mahatma Gandhi attacked machinery, saying it "helps a few to ride on the backs of millions" and warned, "The machine should not make atrophies the limbs of man." With that kind of support, Indian textile workers were able to politically block the introduction of labor-saving textile machines. As a result, in 1970 India's textile industry had the level of productivity of ours in the 1920s.

Michael Cox, chief economist at the Federal Reserve Bank of Dallas, and author Richard Alms tell the rest of the telecommunications story in their Nov. 17 New York Times article, "The Great Job Machine." Spectacular technological advances made it possible for the telecommunications industry to cut its manpower needs down to 78,000 to handle not the annual 9.8 billion long distance calls in 1970, but today's over 98 billion calls.

One forgotten beneficiary in today's job loss demagoguery is the consumer. Long distance calls are a tiny fraction of their cost in 1970. Just since 1984, long distance costs have fallen by 60 percent. Using 1970s technology, to make today's 98 billion calls would require 4.2 million operators. That's 3 percent of our labor force. Moreover, a long distance call would cost 40 times more than it does today.

Finding cheaper ways to produce goods and services frees up labor to produce other things. If productivity gains aren't made, where in the world would we find workers to produce all those goods that weren't even around in the 1970s?

It's my guess that the average anti-free-trade person wouldn't protest, much less argue that Congress should have done something about the job loss in the telecommunications industry. He'd reveal himself an idiot. But there's no significant economic difference between an industry using technology to reduce production costs and using cheaper labor to do the same. In either case, there's no question that the worker who finds himself out of a job because of the use of technology or cheaper labor might encounter hardships. The political difference is that it's easier to organize resentment against India and China than against technology.

Both Republican and Democratic interventionist like to focus on job losses as they call for trade restrictions, but let us look at what was happening in the 1990s. Cox and Alm report that recent Bureau of Labor Statistics show an annual job loss from a low of 27 million in 1993 to a high of 35.4 million in 2001. In 2000, when unemployment reached its lowest level, 33 million jobs were lost. That's the loss side. However, annual jobs created ranged from 29.6 million in 1993 to a high of 35.6 million in 1999.

These are signs of a healthy economy, where businesses start up, fail, downsize and upsize, and workers are fired and workers are hired all in the process of adapting to changing technological, economic and global conditions. Societies become richer when this process is allowed to occur. Indeed, because our nation has a history of allowing this process to occur goes a long way toward explaining why we are richer than the rest of the world.

Those Americans calling for government restrictions that would deny companies and ultimately consumers to benefit from cheaper methods of production are asking us to accept lower wealth in order to protect special interests. Of course, they don't cloak their agenda that way. It's always "national security," "level playing fields" and "protecting jobs". Don't fall for it -- we'll all become losers.

©2003 Creators Syndicate, Inc.

[XBob]

different parts of our country have different nick-names for things, though now with network TV so all pervasive, regional differences are disappearing.

[RaceBannon]

And a bump to those who feel that turning over our nation's industries to our economic competitors represents "Free Trade" back at ya!

[XBob]

382 - "those who feel that turning over our nation's industries to our economic competitors represents "Free Trade"

They are the same ones who mortgage our future, and think they are rich because they have some temporary 'riches' from the mortgage.

The mortgage will come due, and 'Snidely Whiplash' is holding it.

[MonroeDNA]

I live in the most prosperous country on earth. The most prosperous country the world has ever seen. I am lucky, and greatful. People who need job protection here, should paint a big "L" on their head.

I live in the country where other people will do anything to get here. They float over on inner tubes, risking death, just to land here, and have a chance.

A chance of freedom. An opportunity to try. They don't whine about lost jobs or tarrifs. They would laugh out loud at such topics. And gladly take your job, while you are on strike, for half the wage. I support them, and applaud them.

I live in a country founded on individual liberty, with less government intervention than other countries. I live in a country where people from all over the world want just a chance to make it for themselves.

I live in a country where the individual is responsible for his own choices, and is man enough to not whine when it turns out wrong.

I am responsible for my choices, and nobody owes me anything. I could not live with myself otherwise, but apparantly others can.

I have no respect for them.

[RaceBannon]

Bad analogy again.

It is not the opportunities that people like me are ignoring or complaining about, it is the opportunities that people like me are being denied by people like you, people who encourage the bottom dollar as the final say, people who say that the share holder is all that matters, people who move entire technology bases off shore in order to make a statistical gain in profit in relation to expenditures.

People who say that immigrants can earn $8 an hour and feed families ignore the fact that these immigrants live 12 to 15 people in a house, do not pay taxes, do not pay a mortgage or acquire the debt that Americans born here do, and then find themselves trying to pay the rent on reduced wages equal to wages they earned and paid taxes on 15 yearrs ago.
That and the live in some illusion that we still have the same economic laws and regulations of the early 1900's.
That's right: because of free traitors like you, I am worth the same wage I made 15 years ago, literally, only the cost of living is not what it was 15 years ago, is it?

Thanks to free traitors like you, who make false assumptions that this is whining, when all it is , is calling the kettle black, are the reason that we are in this fiscal mess.

When a company pays less in wages to employees, and if profits only go up 1%, because of the change in wage scale there is an illusion of growth on a scale previously unseen, yet is really only 1%, but because wages dropped so much, the 'profit' appears to have gone up 3 to 4%!.

That's right. Illusion.

I would be willing to bet that that is one of the greatest causes of this recent growth spurt. Only one other reason comes to mind: that previous parts purchased have worn out, and they now need to be replaced.

It is not a growing economy, it is a replacement economy that is making any strides.

And thanks to people like you, that is all we are going to have. Especially once the next mass panic hit with the next terror attack.

[sly671]

how many people do you think actually work in their field of study? Not many I can tell you....and if I can't find a job in the US, I WILL go to India if i need to. Otherwise I will take that 1/3 paycut because it's better to have a shitty job and freedoms than to make a shitload and have nothing.

[sly671]

let them leave. That's their right. If I were to tell you you couldn't open a business because you might leave the country, would you raise hell? Most likely yes. Either that or just start your business where it would be the cheapest to run it. And it's not fooling people by telling them it's for the better, because it is. It enriches the wealth of our nation because they never truly leave but make more money to pay more taxes. And why does everyone think of the zero-sum theory? There WILL be more jobs created in the long run. There is no set number of jobs in the world.

[Trajan88]

1924 Mahatma Gandhi: 2003 trade unions.

Don't believe me? Take a look at the 2003 California dock workers' strike - those guys/gals went on strike because mgmt. wanted to institute productivity improvements.

Free trade and capitalism promote the most efficient/productive manufacturers; protective tarrifs reduce incentive to make better products (remember the junk cars that came out of Detroit prior to the Japanese mfg. building plants in the U.S.?).

Trajan88

p.s. I worked in the telecom industry for nearly 10 years and was "uninvited" to the employment party. I saw the writing on the wall many months prior to my dismissal - business is business - we couldn't force our customers to purchase somenting they didn't need/want - funny how that works... too bad the bleeding heart liberals don't understand this and are constantly looking for a free ride via protectionism.

[XBob]

386 - "how many people do you think actually work in their field of study? Not many I can tell you....and if I can't find a job in the US, I WILL go to India if i need to. Otherwise I will take that 1/3 paycut because it's better to have a shitty job and freedoms than to make a shitload and have nothing."

===
Well, what do you have to offer when you graduate from college? Are you qualified to do anything?

If you go to India to get a job, what do you have to offer in India? Will you work cheaper than an Indian, who may or may not have electricity? You will have a college degree, but who will hire you? And why should they hire you? Can you do something an Indian can't do? They have millions of college graduates in India. How will you overcome their requirements that say you can't work there? Why should an American company send you to work in India? Do you have any experience? How many people have you supervised? How many production lines have you set up? In fact, why should they give you a job here in the US?

And as far as the 1/3 pay cut - that is not a pay cut, that is the price of admission to get a job in the US - taxes - 1/3 of your salary - just to get a job - it's not an option you can take or not take. It's a fact of life.

Or, perhaps you could go to China, and get a job there, living in an open bay barracks with hundreds of other workers. Some places, they don't even hot swap the beds. I don't know where you will put anything you buy though, if you can't fit it in a rucksack.

But, that's where the competition is heading us.

[XBob]

386 - maybe you can find a job in china:

http://www.freerepublic.com/focus/f-news/1048617/posts?page=1#1

[XBob]

Got your job offer yet?

China Engineers Its Next Great Leap
http://www.freerepublic.com/focus/f-news/1049246/posts

[sly671]

Yes, I may not be able to find a job because of my "experience"...but you're missing my point in that a degree doesn't mean you will work in your field of study the rest of your life. All it tells a company is that I know how to learn on a real world level and I can handle doing my job. And with your ranting about Indian jobs(I don't know, kinda got bored with your pessimism as if you're experienced in it), I really doubt I will have as much trouble as you're so sure I'll have. I don't see anyone shipping your job overseas just yet, assuming you have one.

[sly671]

And as far as the 1/3 pay cut - that is not a pay cut, that is the price of admission to get a job in the US - taxes - 1/3 of your salary - just to get a job - it's not an option you can take or not take. It's a fact of life.



And all the other countries have so much lower taxes too right? In case you need a little background, I have worked and still do work in the real world. I'm not a 16 year old spoiled brat whose had everything handed to him all his life. I've worked for everything I've got so you can quit with the "he's young so he's stupid" bit. It's getting old.

[sly671]

391 - Got your job offer yet?


One more thing....specifically on this comment....I'm sorry that things don't work the way you would see them happen. One, I'm not finished with school yet so I certainly am not getting or looking for job offers. And two, things take time. Just like every last liberal on the Earth, you seem to expect results in hours, days,....maybe even weeks. Somethings take TIME to develop and to work out. Ask me that question again in 2 years when I'm done and we'll see.

[XBob]

394 - Why don't youall take a look at this. It is chock full of real info on what is happening in this country, and how so many greedy, corrupt American governments and American corps are doing to destroy American workers jobs:

http://www.h1bvisasucks.com/H1BDiscussions_solutions_nj.htm

but I will pick one:

"An Indiana state senator is drafting legislation to restrict public agencies' ability to outsource it work to foreign countries or to use vendors whose U.S. staff consists largely of visa workers. Jeff Drozda, a Republican from the Indiana district of Westfield, found out that a state agency charged with job creation had outsourced work to India's Tata Consultancy Services. "

Trajan88, perhaps you will find where your job went - here -
http://www.h1bvisasucks.com/H1BDiscussions_solutions_nj.htm

[Trajan88]

My old job went to the bucket of "producing massive amounts of product that no one wanted." Sorta like trying to sell ice to those that live at the N. Pole.

Was/am I bitter? No... because my skills attained in college and at work were/are highly marketable.

Does anyone owe me a job? No... I don't need handouts.

Trajan88; TAMU Class of '88; Law Hall (may it R.I.P.) Ramp 9 Mule; f.u.p.!